ENVIRONMENTAL MANAGEMENT ACCOUNTING WITHIN UNIVERSITIES: CURRENT STATE AND FUTURE POTENTIAL A Thesis Submitted in Fulfilment of the Requirements for the Degree of Doctor of Philosophy HUEI-CHUN CHANG MBA (The George Washington University, U.S.A.) BA (National Cheng-Chi University, Taiwan) School of Accounting and Law RMIT Business RMIT University November 2007 i DECLARATION I, Huei-Chun Chang, certify that the work completed is mine alone, that this work has not been submitted previously to quality for an academic award, that the content of this thesis is the result of work which has been carried out since the official commencement date of the approved research program, that any editorial work undertaken by a third party is acknowledged, and relevant ethics procedures and guidelines have been followed Huei-Chun Chang November 2007 ii ACKNOWLEDGEMENTS I would especially like to thank my supervisor, Professor Craig Deegan, for his patience, persistence, and encouragement in guiding me through this research project He remained open-minded to all my ideas and opinions, which allowed flexibility to help me think more and deeply, but he also provided guidance to help me remain focused on the right track Without this flexibility and guidance, this research most certainly would not have been completed I would also wish to thank Mr Antony Young for his assistance and providing relevant information during this project Further, much gratitude is directed to the participants in this research for their valuable time and effort Their willingness to participate, and to share experiences, was truly appreciated The Business Portfolio contributed to the completion of this thesis by providing a Business Portfolio International Postgraduate Research Scholarship for the duration of my study The Portfolio provided great financial support, for which I am also truly grateful Last, but most importantly, the greatest thanks goes to my parents, my husband, Chengnon, and children, Victor and Emily, for believing in me and accompanying me through the most difficult, and challenging, time in my life Their love, understanding, and support (and the provision of much needed distractions) made this research possible iii TABLE OF CONTENTS LIST OF TABLES xiii LIST OF FIGURES xv SUMMARY CHAPTER ONE: INTRODUCTION 1.1 Background .3 1.2 Problem Statement 1.3 Research Objectives 1.4 Research Design 1.5 Research Results and Findings 1.6 Research Limitations and Assumptions 1.7 Research Contributions 1.8 Thesis Organisation CHAPTER TWO: MANAGEMENT ACCOUNTING FOR THE ENVIRONMENT 2.1 Introduction 10 2.2 Accounting, Management Information and the Environment 10 2.3 The Challenge for Accounting – Accounting for the Environment 11 2.4 Definitions on Key Terms 13 2.4.1 Environmental Accounting 13 2.4.2 Environmental Management Accounting 15 2.4.3 Environmental Management 17 2.4.4 Environmental Costs 17 2.4.5 The Notion of Accountability 19 2.4.5.1 Environmental Accountability 20 2.5 Firm-Level Environmental Accounting 20 2.5.1 Subsets of Environmental Accounting 22 2.5.1.1 Environmental Management Accounting 22 2.5.1.2 Environmental Accounting and Reporting 23 2.5.1.3 Other Environmental Accounting and Reporting 25 iv 2.6 Perceived Limitations of Management Accounting Practices 25 2.6.1 Environmental Costs Are Not Considered Significant 26 2.6.2 A Bias towards Monetary Information 27 2.6.3 Allocation of Environmental Costs to Overhead Accounts 28 2.6.4 Misallocation and Underestimation of Environmental Costs 29 2.6.5 Poor Communication between Managers with Accounting and Environmental Management Functions 30 2.7 The Role of Environmental Management Accounting in the Development of Management Accounting for the Environment 31 2.8 Conclusion 32 CHAPTER THREE: ENVIRONMENTAL MANAGEMENT ACCOUNTING 3.1 Introduction 33 3.2 The Development of Environmental Management Accounting 33 3.3 Types of Information Included under Environmental Management Accounting .36 3.3.1 Physical Environmental Information 36 3.3.2 Monetary Environmental Information 37 3.4 Identification and Categorisation of Environmental Costs .37 3.4.1 The USEPA Environmental Cost Scheme 39 3.4.2 The Japanese Environmental Accounting Guidelines 40 3.4.3 The IFAC’s International Guidance Document on Environmental Management Accounting 40 3.5 Environmental Costing Approaches 41 3.5.1 Activity Based Costing 41 3.5.2 Materials Flow Accounting 42 3.5.3 Full Cost Accounting 43 3.5.4 Life Cycle Costing 44 3.5.5 A Summary on the Costing Approaches 45 3.6 Uses and Applications of Environmental Management Accounting 45 3.6.1 Decision Support 46 3.6.2 Performance Measurement 46 3.6.3 Improvement of Environmental Accountability 47 3.6.4 External Environmental Reporting Support 48 v 3.7 Selected Environmental Management Accounting Case Studies .49 3.7.1 Services @AMP Division of AMP Ltd 50 3.7.2 Methodist Ladies College, Perth, Australia 51 3.7.3 A Summary on the Findings of the Two Cases 52 3.8 Conclusion 53 CHAPTER FOUR: ENVIRONMENTAL MANAGEMENT ACCOUNTING AND THE HIGHER EDUCATION SECTOR 4.1 Introduction 54 4.2 Major Environmental Impacts of the Sector .54 4.3 Sustainable Development and the Sector 55 4.4 Environmental Management and Environmental Accountability 57 4.4.1 Current State of Environmental Responsiveness 58 4.4.2 The Link between Environmental Management and Accounting – Environmental Management Accounting 59 4.5 Barriers and Drives to Improving Environmental Accountability 60 4.5.1 Barriers 60 4.5.2 Drivers 61 4.6 Implications for Environmental Management Accounting within Universities .63 4.7 Conclusion 64 CHAPTER FIVE: A THEORETICAL FRAMEWORK FOR ENVIRONMENTAL MANAGEMENT ACCOUNTING 5.1 Introduction 65 5.2 Justification for the Theoretical Perspectives 65 5.3 The Contingency Theoretical Perspective 69 5.3.1 Contingency Theory of Organisations 69 5.3.2 Contingency Theory of Management Accounting 70 5.3.2.1 Overview of the Contingency Variables Relevant to the Design of Accounting Systems 71 5.3.2.2 Physical Environmental Uncertainty as a Variable Relevant to EMA Adoption 72 5.3.2.3 A Contingency Framework for this Study 73 vi 5.3.3 The Development of Propositions Relating to Contingency Theory 73 5.3.3.1 The Influence of Environmental Strategy as a Moderating Variable 74 5.3.3.2 The Influence of the Contingency Relationship between Physical Environmental Uncertainty and Information Processing 75 5.3.3.3 The Influence of the Contingency Relationship between Physical Environmental Uncertainty and Environmental Performance Measurement 76 5.3.4 A Summary on the Contingency Theoretical Perspective 77 5.4 The Institutional Theoretical Perspective 77 5.4.1 Institutional Theory 77 5.4.2 The Influence of Institutional Isomorphism 81 5.4.2.1 The Impact of Coercive Pressure 81 5.4.2.2 The Impact of Mimetic Pressure 82 5.4.2.3 The Impact of Normative Pressure 83 5.4.2.4 A Summary on the Influence of Institutional Isomorphism 85 5.4.3 The Legitimacy Theoretical Perspective 85 5.4.4 The Stakeholder Theoretical Perspective 88 5.4.5 A Further Discussion on Overlapping Theories 90 5.5 Areas of Concern and Factors Suggested by the Theoretical Framework to Explain EMA Adoption 91 5.6 Conclusion 92 CHAPTER SIX: RESEARCH METHODOLOGY AND METHODS 6.1 Introduction 94 6.2 Justification of Qualitative Research Adoption 94 6.2.1 Case Study as the Research Strategy 95 6.2.2 In-Depth Interviews as the Main Method of Data Collection 95 6.3 Research Design and Hierarchy 96 6.3.1 Research Objectives 96 6.3.2 Scope of the Study 97 6.3.3 Research Questions and Propositions 97 6.3.4 Questionnaire Design for the Interviews 99 6.4 Conduct of the Research 103 6.4.1 Phase One – Selection of Research Participants 103 6.4.2 Phase Two – Data Collection 105 6.4.3 Phase Three – Transcribing and Translating Data 107 vii 6.5 Data Analysis 108 6.5.1 Unit of Analysis 108 6.5.2 Content Analysis as Mainly Qualitative 109 6.5.3 Coding the Data 110 6.5.4 Structured Display of the Coded Data 116 6.6 Revisiting the Research Methods 117 6.6.1 Subjectivity 117 6.6.2 Generalisation .118 6.7 Validity and Reliability Checks 118 6.8 Conclusion 119 CHAPTER SEVEN: RESULTS AND FINDINGS – THE CASE OF RMIT UNIVERSITY 7.1 Introduction 121 7.2 General Description of RMIT University .122 7.2.1 Environmental Responsiveness of the University 122 7.3 Results and Discussion for the First Research Objective .125 7.3.1 Current Accounting Practices for Managing Environmental Costs 125 7.3.1.1 Accounting for the Major Environmental Costs .125 7.3.1.2 Lack of Links between Systems for Collecting Physical and Monetary Data 127 7.3.1.3 Management for the Major environmental Costs .128 7.3.1.4 Extent of the Major Environmental Costs 129 7.3.1.5 A Summary on Current Accounting Practices for Managing the Major Environmental Costs 129 7.3.2 Suggestions for EMA Adoption 130 7.3.2.1 Restructuring the Accounting System .130 7.3.2.2 Allocating the Major Environmental Costs to Responsibility Centres .132 7.3.2.3 A Summary on the Suggestions for EMA Adoption 133 7.4 Results and Discussion for the Second Research Objective 134 7.4.1 Attitudinal Barriers 134 7.4.1.1 Low Priority of Accounting for Environmental Costs 134 7.4.1.2 Resistance to Change .137 7.4.1.3 A Summary on the Attitudinal Barriers 139 viii 7.4.2 Financial Barriers 140 7.4.2.1 Efficiency or Financial Considerations 140 7.4.2.2 Resource Constraints .141 7.4.2.3 A Summary on the Financial Barriers 142 7.4.3 Informational Barriers 143 7.4.3.1 Difficulties in Collecting or Allocating Environmental Costs 143 7.4.3.2 Low Physical Environmental Uncertainty 146 7.4.3.3 A Summary on the Informational Barriers .147 7.4.4 Institutional Barriers .148 7.4.4.1 Lack of Institutional Pressure 148 7.4.4.2 Stakeholder Power 150 7.4.4.3 Legitimacy Considerations .151 7.4.4.4 A Summary on the Institutional Barriers 152 7.4.5 Management Barriers .153 7.4.5.1 Lack of Environmental Responsibility and Accountability .153 7.4.5.2 Lack of Integrating the Environment into Strategic Planning 156 7.4.5.3 Few Incentives Provided to Manage Environmental Costs 157 7.4.5.4 Lack of Advocacy from the University Leadership 157 7.4.5.5 A Summary on the Management Barriers 158 7.4.6 An Overall Summary of Barriers to EMA Adoption for RMIT University 158 7.4.6.1 Presentation on the Strong Factors 159 7.4.6.2 Presentation of Findings across Participants and by Management Roles .159 7.4.7 Lessons Learned from RMIT University 161 7.4.7.1 Low Priority of Accounting for Environmental Costs 161 7.4.7.2 Difficulties in Collecting or Allocating Environmental Costs 161 7.4.7.3 Lack of Institutional Pressure 162 7.4.7.4 Lack of Environmental Responsibility and Accountability .162 7.4.7.5 A Summary on the Lessons Learned .163 7.5 Conclusion 163 ix CHAPTER EIGHT: RESULTS AND FINDINGS – THE OTHER FOUR CASES 8.1 Introduction 165 8.2 AUS University, Australia 165 8.2.1 Environmental Responsiveness 165 8.2.2 Results and Discussion for the First Research Objective – Current Accounting Practices for Managing Environmental Costs 166 8.2.3 Results and Discussion for the Second Research Objective – Identifying Factors Influencing EMA Adoption 168 8.2.3.1 Attitudinal Barriers 169 8.2.3.2 Financial Barriers 169 8.2.3.3 Informational Barriers .170 8.2.3.4 Institutional Barriers 170 8.2.3.5 Management Barriers 171 8.2.3.6 A Summary on Factors Influencing EMA Adoption for AUS University 172 8.2.4 Lessons Learned from AUS University 172 8.3 Cases in Taiwan 174 8.3.1 Transworld Institute of Technology 174 8.3.1.1 Environmental Responsiveness 175 8.3.1.2 Results and Discussion for the First Research Objective – Current Accounting Practices for Managing Environmental Costs 175 8.3.1.3 Results and Discussion for the Second Research Objective – Identifying Factors Influencing EMA Adoption .176 8.3.1.4 Lessons Learned from Transworld Institute of Technology 179 8.3.2 Nanhua University 181 8.3.2.1 Environmental Responsiveness 181 8.3.2.2 Results and Discussion for the First Research Objective – Current Accounting Practices for Managing Environmental Costs 181 8.3.2.3 Results and Discussion for the Second Research Objective – Identifying Factors Influencing EMA Adoption .182 8.3.2.4 Lessons Learned from Nanhua University .186 x < Transworld Institute of Technology > Participant Type of Role Feng-Shuai Wu Senior Management Hsia-Ching Weng Management Accounting Shu-Hsiang Hsu Senior Management Yu-Chuan Pang Academic School Quotation ¶50: It’s possible but not easy We have the cost and usage information, but we can’t breakdown the cost to divisions or schools, because we don’t have local meters If an environmental regulation is imposed that requires universities install local or sub meters on all of their buildings, then it’s possible I think the regulation might be imposed some day For example, fire hydrants are compulsory to be installed in every building, why not water or electricity meters? That’s because people don’t think meters are necessary It’s not regulated under current building regulations Unless it’s regulated, it’s very hard to force universities to it… Reference ¶124: I’ve never heard of any universities, which reported any environmental information in their annual reports Reference ¶152: If it becomes a general business practice, then we would probably be asked to report Especially as a university, we should practice what we preach, but as there is no pressure, no pressure from the government or the public, it’s really hard It’s really hard to ask a university to report environmental information ¶26: I wish the government would impose the requirements for reporting environmental performance on universities ¶7: Generally speaking, when there is pressure from the society or community, when there is a need to report some sort of information, or when it’s regulated by a government agency, companies or organisations would consider adopting a new management tool, such as EMA you mentioned But for this University, I don’t think we have applied any form of EMA because there is no external pressure and there are no incentives < Nanhua University > Participant Type of Role Quotation ¶105: Yes, from the Government For example, wastewater recycling systems are required under the regulation to develop a new campus No wastewater Senior Management & recycling systems; no campus development Jen-Wei Wei Environmental Management ¶8: Well, as a university, we should practice what we preach For example, should we use recycled paper although it’s more expensive? When I say Miao-Sheng Senior expensive, I mean it from our point of view, but in terms of social cost, I believe it’s cheaper It’s not possible to ask everyone to pay more just for the Chen Management reason of being socially responsible There should be some sort of mechanism existing to provide the incentives required to motivate people for being environmentally responsible Our Government should have been playing an important role here, but unfortunately, it didn’t Chung-Chiang Academic ¶8: Can you name any university that provides environmental cost information to its staff? Chen School 295 Legitimacy considerations Name: Barriers to EMA adoption\Institutional barriers\Legitimacy considerations < RMIT University > Participant Type of Role Anne Stewart Management Accounting Chris Whitaker Environmental Management Senior Management Stephen Somogyi Senior Management Graham Bell Quotation Reference ¶13: It would seem that some companies have taken it on themselves to report Well, but I also have inkling, like I think it’s great to provide all this information, but whether it means they’re actually performing any better than anyone else, I don’t know I think It’s PR It’s very good PR to be able to say, ‘this is how much we’ve consumed and this is where we reduced our costs’ Reference ¶142: … If we something that’s really good and really successful, we want the good news to be run outside to the people You know before we practice we preach So within the boundary we can it, because we still financially have to be very careful What would be motivated is actually to say this is something we have achieved and link it into the public side ¶84: Yes, we’ve signed several, Talloires Declaration, Greenhouse Gas Challenge, the Sustainable Energy Authority of Victoria… I think there’re enough in there to drive us to the right thing ¶13: And I think reputation is important, but, to be honest with you, I don’t see that’s particularly high profile at this time, either within the university or external to the university It’s not something that everybody is watching, to be honest with you ¶244: There’s no doubt In the short, very short term, it [accounting for the environment] will have a negative impact but in the longer run, it will have a positive impact because our reputation will be enhanced, we will attract more people who want to be attracted to an organisation that is more environmentally conscious < AUS University > Participant Type of Role Anonym (V2) Environmental Management Anonym (V4) Management Accounting Quotation ¶331: I guess because we are doing a number of things, they feel a little bit comfortable than if we were being pointed out by the public saying you’re doing nothing You know, you’re an embarrassment or something, then that will become a priority, but because we can point to a lot of things that we’re doing, I think that takes the pressure of them a little bit from that ¶446: That’s an external report and I would expect when we develop our policy, we would want to elaborate a little bit more on that again, to describe our achievements as being a good energy user Participant Type of Role Quotation Chih-Wen ¶10: This is a religious university Social responsibility is an important factor to be considered while we make any decisions Therefore, our senior Academic School Ding management would embrace new concepts such as environmental accounting because they think it’s a good thing Reference ¶19: We are willing to pay more to construct greener buildings, because it’s considered a right thing to Senior Management & Reference Jen-Wei Wei Environmental ¶19: But I think looking at environmental issues from an accounting perspective is required… It helps to improve the image of the University if the Management University is perceived to be willing to adopt new management technologies or new concepts such as environmental accounting I think it’s not a bad idea to adopt environmental accounting 296 Stakeholder power Name: Barriers to EMA adoption\Institutional barriers\Stakeholder power < RMIT University > Participant Type of Role Quotation Reference ¶52: There are a few, but they are not particularly visible… Reference Senior ¶55: Well, we’ve got Global Sustainability They worry about these things… But I have to be brutally honest and say if it’s not in the senior level, it’s not Chris Whitaker Management having a significant impact It’s not having a significant impact I don’t want to be painting a totally black picture There’re clearly some people around, including myself, who are individually trying controlling it anyway and they’re trying it at home What I’m saying is I think we can get a whole lot of improvement if we actually put some good data through that and good financial information, allowing people to be beneficially resolving further affirmative action So it’s not all black, I mean there are a lot of individual pictures about those sorts of things Environmental ¶18: From the students we involved in some way or some of the things we do, we see more environmental science or socially responsible students doing Chris White Management their environmental part of effort So we have more engagements with students Reference Senior ¶187: Yeah, the global sustainability, that’s all being led by them Anonym (R1) Management Reference ¶192: Well they have influence, but they have no formal power That’s a good point Senior ¶93: No, I don’t feel any pressure at all from stakeholders, no Joyce Kirk Management Reference ¶141: …Students are much more concerned with getting good teaching… I don’t think they’d be concerned about the environment Reference Academic Anonym (R2) ¶152: No Obviously if heads of schools and other managers in the university demanded that sort of information [on environmental costs]… but I don’t School see that happening… They’d think I was rather peculiar if I did I think they would, and a lone voice wouldn’t anything… Senior management of the university will give in if they can see the wisdom of it, but sometimes they won’t It would have to be a very strong voice to convince them, I think, and my voice alone would not anything Nothing It’s hard enough When everyone’s saying the same thing, they’re not always convinced Reference ¶224: Well, clearly the governments think they are key stakeholders, but in my view the most important stakeholders are the students and the researchers and we need to be driven to some extent by what they think are the key priorities We regular surveys on the top ten issues in the minds of our staff and Stephen Senior students… Better student services or better classrooms, they’re clearly on the top… Somogyi Management Reference ¶237: We don’t exist just because we want to exist We’re here because people want to buy our services They’re willing to pay a price, whether to the federal government as loans for higher education or as fee-paying students and they’re the people who drive what we The market demands certain things and we have to deliver No doubt about that ¶167: It comes back to what impacts an individual is more important to what impacts an individual’s position, and then what impacts an individual’s Management community So the individual should always come first That’s human nature Ok, my tuition fee’s my first point of interest The second thing is that, ‘is Wayne Poole Accounting the university financially stable?’ … I think they’re probably more important to students than how much paper and how much water we use each year 297 Participant Type of Role Quotation ¶53: They’re not strategic They’re used strategically on occasions but they’ve been really driven from the middle management’s conscience basically and Environmental understanding of the regulation changes and where they’re heading in terms of Government regulations, which they need to implement because they’re at Anonym (V2) Management the coal face So it was driven from middle management rather than a strategic point of view In fact, I think there is now but there was, for a long time, not even an environmental policy for the University on the strategic level… Management ¶324: I can’t see it on the university’s radar at the moment other than pushing it from a middle management point of view Anonym (V4) Accounting < Transworld Institute of Technology > Participant Feng-Shuai Wu Hsia-Ching Weng Type of Role Quotation Senior ¶67: Since no one has ever asked for it [environmental cost information], it won’t be provided… But if the Ministry of Education or the Government Management assessed universities against environmental performance, then the story would be different Reference ¶83: Different people have different concerns, but I don’t think they care about whether we are trying to decrease our environmental impacts or not, if Management such impacts not directly impact their daily life Accounting Reference ¶100: If the Ministry of Education required us to it, then we would, because we are subject to the special performance evaluation by the Ministry… < Nanhua University > Participant Chih-Wen Ding Jen-Wei Wei Type of Role Quotation Reference ¶12: They might think environmental issues are important, but I don’t think they would think about managing environmental costs It’s partly because less attention has been paid to environmental costs, but mainly because the Ministry of Education has not requested universities to anything about managing environmental costs or improving environmental performance I believe if the Ministry imposes the requirements to manage environmental Academic costs, universities will it But now, universities just don’t have such pressure No pressure; no action School Reference ¶18: Because education is not free and students have to pay for their room and board and tuition They don’t care about environmental issues They don’t care about how you manage the environmental costs What they care is whether they can get what they want Students are one of the major stakeholders for universities Their concerns have to be taken into account when you decide to change any practice or put in place any policy Reference Senior ¶60: We are assessed against traditional KPIs such as total floor spaces and total beds in the dorm As we are not assessed against environmental Management & performance, we are just continuing doing things as we did before Besides, students won’t appreciate what you have done in environmental management Environmental They expect that internet access is available in every room, the books or magazines they want will be there in the library, and all those sorts of things Management Why bother doing environmental management or energy controls? They don’t care Students just don’t care Reference ¶63: If environmental KPIs per full time equivalent student are used to assess a university’s environmental performance, some universities just can’t justify why they consumed so much electricity or water You should ask the Ministry of Education why no attention has been paid in this area Reference ¶71: No one cares about whether universities are doing their share to protect the environment What interests the government or the society is research output, but neglected is that universities require consumption of resources, including environmental ones, to produce research output Are universities environmentally responsible? Even if you are, no one cares 298 Meng-She Chen Management Accounting Reference ¶109: If we are required to provide such information [environmental reporting], for example by the Government, we certainly will provide it If we voluntarily provide such information, I think the Ministry of Education might think we don’t get enough things to or we've got more than enough resources It won’t be appreciated ¶78: … You know we, as a private university, will collect information that is required by the Board of Directors or the Ministry of Education If they don’t ask for it, we won’t collect and report it 299 Few incentives provided to manage environmental costs Name: Barriers to EMA adoption\Management barriers\Few incentives provided to manage environmental costs < RMIT University > Participant Type of Role Quotation ¶38: So to try to make management reduction, you got to get consequences for not doing it If I said to the heads of schools, ok, everything you managed to Chris Senior save on water, energy and waste management in your school, you can keep it for staff development purposes I will give you management information, Whitaker Management account information as to what your expending is month by month I will tell you what it’s been for the last twelve months… I will get their intention ¶134: There isn’t really a system apart from just really reporting on budget performance and acceptance whether that’s good or bad It’s not really a bonus Environmental Chris White system, so there is no financial reward type system that can be linked So it’s mainly for tracing whether you perform within your budget, responsibly or Management not ¶198: No, absolutely not, the only way you could it would be to … I mean if we have direct … if we can attribute costs, say energy consumption, if Anonym Senior we can meter that and attribute it, then you could (but we don’t) hand back savings to those schools, that’d be a start It’s possible to it, it’s just we don’t (R1) Management it at the moment Reference ¶76: … I think another reason why we haven’t focused on trying to reduce expenditure is because if we make a surplus in any year, we lose it It just goes to the centre So there’s been no incentive to try to reduce costs I mean there’re all sorts of reasons and I could go on and on… There just wasn’t the Anonym Academic incentive to it (R2) School Reference ¶84: Nothing comes down from the top to say, ‘be careful to watch what you spend on electricity’ The university has come to a difficult financial period over the last couple of years, two or three years… During the time of the difficult financial situation, we all tightened our belts… But we didn’t tighten them to that extent There just wasn’t the incentive to Participant Type of Role Quotation Anonym Environmental ¶772: That’s why I say it’s self-driven (V2) Management Anonym Management ¶769: There’s no incentive…Well, there’s no incentive other than the one we’ve put in place for the electricity But other than that, there’s no direct (V4) Accounting incentive 300 < Transworld Institute of Technology > Participant Type of Role Feng-Shuai Wu Senior Management Hsia-Ching Weng Management Accounting Quotation ¶35: If major environmental costs could be clearly defined or a key environmental performance index could be provided and used to assess key managers’ performance, they would definitely attract people’s attention Who cares about how much energy or electricity has been used? No one cares and they don’t even care about any price increase in energy usages Every year the budget for electricity usage is determined based upon usages in previous years or changes in student numbers and performance is assessed against this budget If the actual usage is over the budget, the bill still has to be paid and no one will be held accountable It’s true that our president always says we should control our electricity usage by turning off air-conditioners or lights It helps but doesn’t help a lot, because not enough incentives have been given to change the behaviours ¶104: If the energy price keeps increasing, there will be a good reason for us to separately identify electricity cost and subsequently allocate it to both administrative divisions and academic departments But we just don’t have such a plan in the near future There are no incentives at all and that’s not our priority 301 Lack of advocacy from university leadership Name: Barriers to EMA adoption\Management barriers\Lack of advocacy from university leadership < RMIT University > Participant Type of Role Anne Stewart Management Accounting Chris Whitaker Senior Management Graham Bell Environmental Management Quotation ¶32: …We’ve different accounts So we think, ‘ok, how can we capture costs properly?’ You know, at the end of the day, what is management interested in? They’re interested in how much we spend on travel and how much we spend on consumables So would they ask how much we spend on the environment? … They never have, or it hasn’t come through to me… They may discuss it at different forums But it would be very hard to measure ¶31: …I guess it’s because we haven’t captured the hearts and minds at the senior level… Partly we never take time to it Secondly, we probably have other things on our mind from time to time Yeah, that was probably the main reason But this sort of issues would’ve been identified and go to the senior executive members of the university, maybe two, three, four times a year… How much discussion they have? Three, four minutes a year, maximum, where we probably just recorded that’s very interesting and then moved on, because it doesn’t seem to be any imperative or relative to the other parities… There’s no compulsion to this [accounting for the environment] ¶88: … I’ve been to a couple of presentations by Monash where the Vice-Chancellor gets up and talks to a lecture theatre centre full of students, staff, outsiders, all interested in improving environmental management, and he’ll answer questions from them He’s not afraid of the questions out there that might be asked that might put him on the spot RMIT’s not in that field yet Participant Type of Role Anonym (V2) Environmental Management Anonym (V4) Management Accounting Quotation Reference ¶138: There hasn’t been a senior management executive imperative to account for it… Reference ¶574: … It really is a huge area… See, it’s easy to concentrate on my side, because it’s easily defined and you can it But compared to the total picture of sustainability, it’s like a big toe on a foot… in terms of accounting, they [senior management] haven’t even thought about it and they’re not committed to it Reference ¶753: You’ve got to get buy, you know, senior management… Absolutely It’s got to come from the top Reference ¶766:… the process of getting buy-in from the chief executive is absolutely critical, otherwise you won’t go anywhere in this sort of stuff Reference ¶144: There’s been no driver for it Reference ¶570: No pressure from the senior management 302 < Transworld Institute of Technology > Participant Chih-Cheng Chang Shu-Hsiang Hsu Type of Role Quotation ¶120: It’s up to the top management Commitments to the environment from the top management are very important Senior Management & Environmental Management Senior ¶38: It should be one of the imperatives from the top and it also depends on whether our accountants have such knowledge Management < Nanhua University > Participant Jen-Wei Wei Meng-She Chen Type of Role Quotation ¶50: Senior management support is really important for implementing environment related policies or practices Senior Management & Environmental Management Management ¶114: But we are just accountants and we won’t be able to it [accounting for the environment] without strong support from the senior management Accounting 303 Lack of environmental responsibility & accountability Name: Barriers to EMA adoption\Management barriers\Lack of environmental responsibility & accountability < RMIT University > Participant Type of Role Anne Stewart Management Accounting Chris Whitaker Senior Management Chris White Environmental Management Graham Bell Environmental Management Quotation ¶128: … you are accountable through the cost itself That’s an encouragement I know a lot of people order stationery these sorts of things, and they get wasted really quickly So we’ve had a lot of cost controls over here about years With a strong cost control, we have greatly reduced our consumption, which is a good thing, because otherwise people would just get another one So the very cost controls we’ve got will certainly have helped Property Services, their budget is very tightly controlled When it comes to the stuff that they pay out, obviously they control They can things to save money around water and things like that They can’t control every single tab in the place, but they can control some of that cost That’s their interest to because people look at their budget Reference ¶28: … but you have got to allocate the responsibilities for actually managing it and personally reducing it We are not doing that yet Reference ¶38: … I don’t pay those bills I don’t pay the water bill, I don’t pay the energy bill, [and] I don’t pay the cost of managing all the wastes we generate, so there is no imperative there I do, however, pay for the telephone usage, so I was interested in that and said, ‘well, let’s try to keep our telephone cost down, because that’s better for us and increases the money for other purposes’… So to try to make management reduction, you have got to get consequences for not doing it I mean this is quite apart from any environmental beliefs you may have… but it’s not showing up on my accounts That’s not to say it’s not been evaluated, but actually we don’t know what it is ¶98: But whether or not they take on that responsibility, I think it’s another thing I say there are more people responsible, but it’s more difficult to get people to take on that responsibility Reference ¶10: I think that there’s a collective conscience about it, but again because of the size of the place and as I explained earlier, without active cultural change agents working within the organisation, people become complacent They’re just blasé about how they treat the facilities and power consumption… I’ve found in my experience a lot of people coming to universities expect that the room will be there, that the book they want in the library will be there, that the lecturer knows the answers to the questions they have will be there It doesn’t work that way People have to work at that They have to work at saving their energy by turning off the light when they leave Simple things like that Reference ¶75: At the end of the day, probably not, because I can’t control it We’re on a certainty that we can’t stop the students or the staff turning everything on What we can is to try to make most things that they turn on the most efficient, and then be reliant on cultural change through their community to help them drive the price down Reference ¶98: …They may believe that they’re working at it But I can tell you that they haven’t phoned me up and asked me for what their electricity bill was… I mean, if they knew what that was, they’d get a pretty good idea what it costs the university to make that facility available to them… There’s another aspect of cultural change that needs to probably work more so with middle management than anywhere else Senior management can see our expenditure that is used to save on the environment Down at the local level, the lab technicians can see it The middle management area gets so consumed with health and safety, getting the budget reporting, and all that sort of things, that they unfortunately cannot see a lot of costs It’s not a criticism, but it’s just what happens at that level Reference ¶120: No, I don’t think the heads of portfolios would be grilled as to why their operating costs are increased 304 Anonym (R1) Senior Management Joyce Kirk Senior Management Margaret Gardner Senior Management Paul Stockwell Management Accounting Anonym (R2) Academic School Stephen Somogyi Senior Management Reference ¶22: I am a member of the planning and resources committee which makes all of the financial decision in the place, so I can’t totally get away with saying I have no responsibility… so to the extent that we have no policy in relation to that, then I’m at least indirectly responsible, or at least partially responsible Reference ¶142: …I guess the responsibility goes right through the organisation, right down to the individual, it all gets aggregated up, and then when we come to report, the person who finally signs up on that would be the VP Resources, because Property Services reports to him, but that’s not to say that Steve Somogyi personally has responsibility for it… It seems that it’s a kind of a food chain here, and so it’s got to get down to the school, then it’s got to get down to the program… At the end of the day, to some extent, it’s about individual decisions… Everyone has to take some responsibility that’s appropriate for their level Reference ¶167: As a PVC, I’m aware of what’s in the business plan and I’m also aware of what’s in the strategic plan, and the managers within the portfolio are aware of those as well So to that extent, yes, I think we’re all held accountable But I have to say, if I use too much electricity in my office, I don’t know what would happen to me Reference ¶171: Well, it depends on what level you’re measuring accountability – whether accountability is at an individual level or at a group level, or a team level or a portfolio level, or a university level Reference ¶6: I should say, in terms of the university’s overall management of particular things like water, energy, paper costs and waste management, the day-today management accountabilities for those rest with the director of Property Services, who reports to the Vice President of Resources, who is the Chief Operating Officer, and so that’s where the day-to-day or the overall accountabilities reside Reference ¶10: I have overall responsibility for the university, but that’s what I was saying they actually reside in our Property Services area, they’re responsible for water, energy management, paper, and waste management, and they report to our chief operating officer, who reports to me Reference ¶24: Well, that’s because that’s where their responsibility lies Reference ¶59: They’re not held accountable currently for the usage of paper, except to the extent that it’s part of their overall cost, which they themselves would be trying to reduce We ask people to try and reduce the amount… but there’s still a large amount of paper used… It’s only just part of their costs actually Reference ¶136: If they had their own budgets and their own measures [tied to particular attributes of environmental performance], then they would monitor and control that regularly It’s the nature of the way people are If they are not being held accountable for it, then they are not really going to worry about it They might turn the lights off to reduce our energy usage, but they are not really focusing on that Reference ¶175: No, it’s not their main focus… It’s not monitored, and it’s not one of their key accountabilities… But they’re not really held accountable for environmental usage So if that’s not in there as one of their key accountabilities, then it’s not going to be front of mind in their reactions… It’s not their key focus at the moment ¶186: … but all the classrooms, they’re shared When it’s a shared space, people don’t have a sense of ‘I’m responsible for this’ ¶131: Well, in the longer run, given that I’m the Vice President of Resources, I think it will be my responsibility to effectively manage our use of the environment and the costs of the resources we utilise, so I expect that it will come from me That needs to be shared with everybody else in the organisation, because I can’t manage that on my own 305 Wayne Poole Management Accounting Reference ¶91: No, but a budget is established, and the budget takes those costs into account… So as an organisation, from a consolidated point of view, we’re accountable for our budget to variance actions We are accountable for that Can I drive my accountability to make change happen? I can only that by asking people to reduce costs, especially variable costs It’s very hard to reduce fixed costs, but there’s a degree of variability in energy usage so you can ask people to be more energy efficient and demonstrate there is a bottom line impact of doing that Can I actually make that happen? It’s a secondary thing Reference ¶103: I think it is, because again it’s a community issue and the university is part of the community Therefore, it should its fair share to reduce what the total community spent on energy… So I think we have to our own social responsibility, to our part for the community Participant Type of Role Anonym (V2) Environmental Management Quotation Reference ¶635: I probably shouldn’t say this, but I don’t believe that I’m being held accountable… No one’s putting pressure on me on any of those issues at the moment, but I know that they’re important, and within the resources we’ve got, we should try and what we can I guess the budgeting process in one sense holds us accountable to some degree… Reference ¶653: I was going to say you almost act autonomously and as long as I’m getting some results or matching the expectations, then there’s no one coming over and saying, ‘what’s going on and can’t we drive this further?’ … But if it’s within those budgets, it’s really me saying, ‘well, let’s try and drive it down further’ < Transworld Institute of Technology > Participant Type of Role Feng-Shuai Wu Senior Management Quotation Reference ¶52: I don’t think it’s possible to assess key managers against their environmental performance Within this University, the environmental planning group has the pressure to control environmental costs, but they focus on controlling the budget rather than environmental performance Reference ¶54: Who should be held responsible? Theoretically, administrative divisions should be held responsible < Nanhua University > Participant Chih-Wen Ding Type of Role Quotation Academic ¶22: As schools or departments are not allocated any budget for electricity or water, we don’t have to worry about it because it’s not us who pay the bill School We are not responsible for electricity or water or whatever environmental costs incurred We are just not held accountable for that 306 < National University of Kaohsiung > Participant Type of Role Senior Chieh-Jung Management & Huang Environmental Management Management Chu-Ying Lien Accounting Quotation ¶82: No, I am not held accountable Nobody is held accountable, but we think about what we can to reduce the costs… Who should be held accountable for the water or electricity costs? I think it’s not a problem to us, as these costs are required and unavoidable for campus operations ¶35: I think that’s within the responsibilities of General Affairs We accountants are just accountants and we are not held accountable for environment costs incurred 307 Lack of integrating the environment into strategic planning Name: Barriers to EMA adoption\Management barriers\Lack of integrating the environment into strategic planning < RMIT University > Participant Chris White Type of Role Environmental Management Anonym (R1) Senior Management Margaret Gardner Senior Management Wayne Poole Management Accounting Quotation ¶165: I think we need to get some more systems or practices in environmental areas in place before we could get to that stage [accounting for the environment] Reference ¶130:… I think that’s [updating environmental policy] good because it makes it more visible, more conspicuous out there, but if I can put it this way, that sort of thing is necessary but not sufficient, because RMIT is always making policies, but does it actually mean anything? So it’s not just that we make policies, the next question is, ‘well, what does this mean on the ground and how are you going to implement it?’ Reference ¶133: So we run the same risk with an environmental policy, you can promulgate it, but will anybody anything about it? So you have to have an implementation strategy as well, that’s all I’d say, you’ve updated it, great, but what’s the implementation plan? ¶22: I certainly think that it’s important that we all these things, and I expect those areas that are responsible for them will be working hard on bringing those things forward, the other things that we do, and we’ve tended to over time, we’ve had students involved in projects, and they bring ideas forward, and there’re things that we look at, and see if we can take up, or if there are ways that we can take advantage of those, and we’ve got a committee that also looks at these matters in the university, and brings forward suggestions, and they all feed into that process, you know, your budget processes, into your planning processes, so you can look at what you need to to keep going forward So that’s what I expect them to be doing, and that’s what I expect … ¶43:… You might say that there’s prescribed legislative requirement to be accountable, but we aspire in this area, and we make reference to that in our annual report But we then take that to the next level? I don’t think we So I think it’s aspirational rather than directional at this point Participant Type of Role Anonym (V2) Environmental Management Anonym (V4) Management Accounting Quotation Reference ¶53: They’re not strategic They’re used strategically on occasions, but they’ve been really driven from the middle management’s conscience basically… In fact, I think there is now, but there was, for a long time, not even an environmental policy for the university on the strategic level Reference ¶332: Yeah, as I was saying, for the sake of repeating ourselves, we understand we need a framework for this and we’re going to put it in place ¶579: Having the data linked to some sort of strategic goal is the bit that’s missing I mean we’ve got the data, we’ve got it available… We’ve got the ability to benchmark these things as well and work out how much we’re spending per head and all of those sorts of values… The university hasn’t actually reached that point… And that’s easy to test because you can look at the strategic plan and the documents sitting on the university’s website and stuff like that 308 < Transworld Institute of Technology > Participant Type of Role Feng-Shuai Wu Senior Management Quotation Reference ¶23: If we had a formal environmental policy there, we could have done much better Reference ¶59: Commitment itself is not enough There is no doubt that you should have the commitment first, but besides that, you should operationalise the commitment I mean you need a formal policy or some procedures to achieve the goal, monitor your progress, and make required amendments to the policy It’s a closed loop What we are lacking is environmental awareness among staff and students and strong commitment from the senior management It’s [managing environmental costs] still a soft issue for the university, although we have some environmental initiatives in place < National University of Kaohsiung > Participant Chieh-Jung Huang Type of Role Quotation ¶74: I think it’s not that hard to ensure compliance The ten-point action plan is very flexible The Declaration is voluntary, and implementing an action Senior Management & plan is not compulsory Otherwise not many universities are willing to sign Environmental Management 309 ...DECLARATION I, Huei-Chun Chang, certify that the work completed is mine alone, that this work has not been submitted previously... party is acknowledged, and relevant ethics procedures and guidelines have been followed Huei-Chun Chang November 2007 ii ACKNOWLEDGEMENTS I would especially like to thank my supervisor, Professor... 134 7.4.1.1 Low Priority of Accounting for Environmental Costs 134 7.4.1.2 Resistance to Change .137 7.4.1.3 A Summary on the Attitudinal Barriers 139 viii 7.4.2 Financial